Bakkavor strikes agreement on debts

Bakkavor strikes agreement on debts

Bakkavor, the convenience food group, today (31 March) set out its stall to look to the future after securing a refinancing deal with its lenders.

The Iceland-listed group has spent recent months in discussions over a refinancing package with its lenders and today announced that it had struck an agreement on its GBP316m (US$480m) debts.

Some 46% of the debt will be turned into share capital and the remaining debt will become a "convertible debt instrument" to mature in 2014.

Speaking to just-food, CFO Richard Howes said the refinancing deal and Bakkavor's improved profits throughout 2009 meant the company could now look to the future and focus on its operating performance.

"We announced today the completion of the refinancing of our Icelandic holding company's debt, which, in essence, is a debt-for-equity swap and that by it's nature secures the funding position for the group between now and 2014," Howes said.

"The substantial in trading performance has de-leveraged the group quite considerably in the last year. Any concerns over our financial position are definitely put behind us following this refinancing."

Earlier today, Bakkavor booked narrowing full-year losses as the company improved its operating profit in 2009. Bakkavor reported an annual loss of GBP11.8m for 2009, compared to a loss of GBP154.2m a year earlier.

Turnover was up 2% to GBP1.65bn. Bakkavor CEO Ágúst Gudmundsson said the company had enjoyed sales growth within key businesses in the UK in 2009 and had seen that growth continue in the early part of this year.

"We have actually seen quite good growth in the first weeks of 2010 and we expect that to continue. It seems that the consumer is starting to spend again and I believe that we will see good healthy growth in the UK in 2010," Gudmundsson told just-food.

"We are also seeing other parts of the world - especially the US and China - coming back with strong growth in the first couple of months in 2010. There is reason for us to be optimistic for the growth prospects for the year."